v//é g‘é’nus - genus paper
TRANSCRIPT
§\\\V//é Genus Paper & Boards Ltd.
(A Kailash Group Company)CIN N0 : L21098UP2012PLCO48300 PAN NO-AAECGS483A
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Corporate Office : D-116, Okhla industrial Area, Phase-l, New Delhi-110 020, India
Ph. : +91-11-47114800, Telefax : +91-11—47114833
October 31 , 2018
BSE Limited
(Corporate Relationship Department],1st Floor, PJ. Towers,Dalal Street, Fort,
Mumbai — 400001
E-mail: [email protected]
Scrip Code : 538961
National Stock Exchange of India Ltd.
(Listing & Corporate Communications],Exchange Plaza, Plot no. C/ 1, G Block,Bandra—Kurla Complex, Bandra (E),Mumbai - 400 051.
E-mail: cc [email protected]
Symbol : GENUSPAPER
Dear Sir/Madam
Sub: Investor Presentation
Pursuant to Regulation 30 of the SEBl [Listing Obligations and Disclosure Requirements)Regulations, 2015. we enclose herewith the investor Presentation.
We request to kindly take the same on record.
Thanking You
Yours truly,For Genus Paper & Boards Limited
WAnui Ahluwalja
_
Company Secretary7"
Regd. Office & Works : Kanth Road, Aghwanpur, Moradaoad-244001 (U.P.)Ph. : +91-591—2511171, 09837075702/3 Fax: +91-591-2511242
G‘é’nusenergizing lives
Genus Paper & Boards Ltd
Investor PresentationOctober 2018
Safe Harbour
This presentation and the accompanying slides (the “Presentation”), by Genus Paper & Boards Limited (the “Company”), have been preparedsolely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, andshall not form the basis or be relied on in connection with any contract or binding commitment what so ever. No offering of securities of theCompany will be made except by means of a statutory offering document containing detailed information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Companymakes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness,fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of theinformation that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expresslyexcluded.
Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects thatare individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and aresubject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but arenot limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the industry inIndia and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth andexpansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s marketpreferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievementscould differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update anyforward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included inthis Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.
2
Performance Highlights
Performance Highlights H1FY19 (YoY)
4
Revenue
160.2
253.2
H1FY18 H1FY19
+58.1%
EBITDA
16.719.5
H1FY18 H1FY19
+16.8%
PAT
6.5 6.5
H1FY19H1FY18
Rs. Crore
Business highlights:
Decline in profitability can be attributed to the following :
• The Power & Fuel cost (P&F cost) was 9.5% of sales in H1FY18 which has been increasing continuously over the last twelve months. In view of theban, company had to shift from pet coke to costly alternative fuel i.e. steam coal. In H2FY18, the ban impacted partially, and P&F cost rose to 12.4%of sales. However, complete impact of the ban has been witnessed in current Financial Year, leading to increased P&F cost to 16% of sales in H1FY19
• Increase in Finance Cost by Rs 3 Cr can be attributed to rise in working capital for Kashipur Plant
Improving Utilisation
5
1,00,000 1,00,000
1,40,000 1,40,000 1,40,000
1,52,500
1,07,500
61,655
80,017 83,907
1,00,4041,09,310
1,14,343
92,305
FY15 FY16FY13 FY14 FY17 *FY18 **H1FY19
13%
Capacity Production
62 % 80 % 60 % 72 % 78 % 75%Capacity
Utilisations
*Kashipur Capacity adjusted for 2 months of operations MT
86%
**Annualised basis
Gaining Momentum
6
Revenue
247289
316 306346
253
FY16 *FY17FY14 *FY18FY15 *H1FY19
EBITDA
19
26 2622
36
19
FY14 *H1FY19FY15 *FY18FY16 *FY17
PAT
10 10
57
15
7
*FY18FY16FY15FY14 *H1FY19*FY17
Cash PAT
1820
1720
28
13
*FY17FY16FY14 FY15 *FY18 *H1FY19
Rs. Crore
*As per Ind-AS rest as per I-GAAP
Revenue Breakup
7
Kraft Paper Revenue
208239
281 288328
253
FY16FY14 *FY18FY15 *FY17 *H1FY19
Steel Ingot Revenue
39
50
35
179
FY14 FY15 FY16 *FY18*FY17 *H1FY19
0
Rs. Crore
18
26 2722
36
19
FY16 *FY18FY14 FY15 *H1FY19*FY17
1.0
0.6
-0.7
0.10.2
FY14 *FY17FY15 FY16 *H1FY19*FY18
0.0
Kraft Paper EBITDA Steel Ingot EBITDA
*As per Ind-AS rest as per I-GAAP
Profit & Loss Statement- Standalone
8
Particulars (Rs. Crs) Q2FY19 Q2FY18 YoY H1FY19 H1FY18 YoY
Revenue from Operations (Net of Excise) 132.2 87.4 51.3% 253.2 160.2 58.1%
Raw Material 88.6 60.8 167.2 111.1
Employee Cost 2.9 3.0 8.0 5.9
Other Expenses 32.3 14.2 58.5 26.4
EBITDA 8.4 9.4 -10.2% 19.5 16.7 16.5%
EBITDA Margin 6.4% 10.8% 7.7% 10.4%
Other Income 0.3 1.3 2.8 2.4
Depreciation 3.3 3.2 6.5 6.5
EBIT 5.5 7.5 -27.2% 15.8 12.6 25.0%
EBIT Margin 4.1% 8.6% 6.2% 7.9%
Finance Cost 2.7 1.3 5.8 2.8
Exceptional Item (Gain) / Loss 0.0 0.0 0.0 0.0
Profit before Tax 2.7 6.1 -56.0% 10.0 9.8 1.9%
PBT Margin 2.0% 7.0% 3.9% 6.1%
Tax 1.3 2.0 3.5 3.3
PAT 1.4 4.1 -65.0% 6.5 6.5 0.0%
PAT Margin % 1.1% 4.7% 2.6% 4.1%
EPS 0.06 0.16 0.25 0.25
As per Ind-AS
Balance Sheet-Standalone
9
Assets (Rs. Crs) Sept-18 Mar-18
Non-current assets
Property, plant and equipment 213.3 218.2
Capital work-in-progress 4.7 2.8
Financial assets
Investments 102.2 75.2
Loans 36.6 72.2
Non Financial Assets 15.4 17.0
Tax Assets - -
Sub-total - Non-Current Assets 372.2 385.4
Current assets
Inventories 32.5 34.4
Financial assets
Loans 0.0 0.0
Trade receivables 78.4 76.8
Cash and cash equivalents 1.4 0.5
Other Bank Balances 3.9 3.9
Others 0.5 0.4
Non Financial Assets 11.7 12.4
Sub-total - Current Assets 128.4 128.4
TOTAL – ASSETS 500.5 513.7
As per Ind-AS
Liabilities (Rs. Crs) Sept-18 Mar-18
Equity
Equity Share capital 25.7 25.7
Other equity 333.7 329.1
Sub-total - Shareholders' funds 359.4 354.8
LIABILITIES
Non-current liabilities
Financial liabilities
Borrowings 15.9 21.4
Long Term Provisions 0.6 0.6
Deferred Tax Liability 23.5 23.6
Sub-total - Non-current liabilities 39.9 45.5
Current liabilities
Financial liabilities
Borrowings 35.3 35.7
Trade payables 46.3 52.6
Other Liabilities 14.9 20.7
Provisions 0.1 0.2
Current tax liabilities (net) 3.2 3.1
Non Financial liabilities 1.3 1.2
Sub-total - Current liabilities 101.2 113.4
TOTAL - EQUITY AND LIABILITIES 500.5 513.7
We are
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One of the Leading Manufacturers of Kraft
Paper in India
Preferred Supplier for Corrugated Box Manufacturers
Preferred Vendor for Large FMCG Clients
Dominant Player in North India
Reusing & RedefiningWaste Paper
Our History
11
1996 2006 2011 2013 2015 2018
Incorporated as ‘DSM Papers
Limited’
Name changed to Genus Paper
Products Limited
Approval for the Demerger of Non
Power Infrastructure Business
Post the scheme of Arrangement, Genus
Paper & Boards Limited was formed as a public limited company and
listed on the NSE & BSE
Leased Manufacturing
plant in Kashipur with a capacity of
75,000 MTPA
Enhance Production capacity from
100,000 to 140,000 MTPA
2002
Name changed to Kailash Paper Products Limited
Experienced Board of Directors
12
Mr. Ishwar Chand Agarwal, Non Executive Director
Mr. Bhairon Singh Solanki, Non Executive Director
Mr. Kailash Chandra Agarwal, MD
Ventured into business at early age and now has more than four decades ofrich experience in diverse businesses of Power, Electronics, Coke, Coal, Sugar,Finance, Leasing, Cement, Paper, Agro processing etc
He is the founder of progressive and reputed Kailash Group. He is the drivingforce behind the success achieved by the Group. He is an active philanthropistand is involved in various social welfare activities
He has rich experience of around two decades in the business of powerinfrastructure, electronics, paper products, iron ingots, coal, coke, sugar,cement and apparels
He has vast experience and proficiency in strategic and organizationalplanning, global tax structure, risk management, creating long-termsustainable shareholder value through proactive investor relation, budgeting,corporate finance and accounting
B.E. (Hons.) from BITS, Pilani and M.Sc. (Engg.) from Cranfield Institute ofTechnology, Cranfield, Bedfordshire, England
He looks after the formulation and implementation of company’s policies oftechnology up-gradation and development, corporate governance, socialresponsibility, and auditing etc.
He has extensive experience of more than 36 years in implementation ofGovernment policies and their governance. He has worked as Senior Executive ofRajasthan Financial Corporation, Jaipur and also served on deputation to Bureauof Industrial Promotion (BIP), Jaipur
He has vast industrial exposure and in-depth knowledge of trade policies andtheir implications. He has also considerable experience and immense knowledgein varied fields like finance, accounting, auditing, corporate affairs and allied legaland taxation matters
Mr. Rameshwar Pareek, Non Executive Director
Experienced Board of Directors
13
She has a rich experience of insurance business management and worked as aninsurance consultant in the reputed insurance company Max Bupa LifeInsurance
Mrs. Anu Sharma, Non Executive Director
Mr. Yash Todi, Additional Non Executive Director
He has been in the employment of the Company since its inception
He has a vast experience of 40 years in the field of human resources andadministration and currently serving as Director in Human Resources
Mr. Surya Prakash Sinha, Executive Wholetime Director
Mr. Udit Agarwal, Non Executive Director
He belongs to a reputed business house 'Saran Group' and has over one and ahalf decade experience in the development and exports of handicraft items
He is a young and energetic businessman with strong ability to provideinsightful analysis and recommendations
Mr. Rajendra Aggarwal, Non Executive Director
Mr. Himanshu Agarwal, Executive Wholetime Director
He has started his carrier by joining Genus Paper in the year 2004 and has beeninvolved in family business for over 12 years
He has gained extensive experience in the Paper Industry Sector and has developedunderstanding of risk management, efficient processes and operational excellence
He is having a vast experience in the field of business management
He is a non executive Independent director on the Board of Company
Before Genus, he was working as an Operations Analyst at Goldman Sachs & Co.and has played a pivotal role in driving the operational functions of theorganization
He looks after the formulation and implementation of Co’s operational policies
Management Team
14
Mr Kailash AgarwalMD
Mr Sanjay AgarwalChief Financial Officer
Mr Jitender SinghHead- Technical
Mr. Anuj AhluwaliaCS & Compliance Officer
Mr G C KothariHead - Commercial
Mr O D SharmaHead- Projects
Mr Ajeet SinghHead- Marketing
Certificates & Awards
15
ISO Certificates Awards
For Environment Management System
For Quality Management System
Business Overview
Our Products
17
Kraft Paper
Mild Steel Ingot
Kraft paper is a type of industrial paper andused by packaging industry for manufacturingcorrugated boxes and liners, corrugated sacksand composite containers
Specification:
Range from 100 GSM to 400 GSM
Burst Factor (BF) range from 18 to 40
Contribute less than 5% of the total business
Steel ingot is manufactured by using theexcess power generated in our cogenerationplant after meeting our requirement for Kraftpaper
Steel ingots are used for manufacturingvarious types of steel bars by rolling mills
~90% Used by
corrugated box manufacturer
Industry Served
FMCGConsumer DurablesPharmaceuticalsGarments, Textiles & FootwearE-Commerce
Catering to Diversified Industry Needs from FMCG toIndustrials to E-Commerce
Growing Industry Demand
Manufacturing Capabilities
18
Owned 140,000 MTPA at Moradabad (UP)Leased 75,000 MTPA at Kashipur
(Uttarakhand)Total : 215,000 MTPA
100 KG of Waste Paper 92 KG of Kraft Paper
Two Waste paper based manufacturing plant of Kraft Paperwithin the factory premises of Moradabad (UP)
Multi Layered Kraft paper with High Tear Factor (TF), HighBurst Factor (BF) i.e. 25, 28, 30, 32, 35 & 40 BF with GSMranging from 100-400
“ZERO Liquid Discharge Plant”
To address the Growing Demand
19
✓ We have leased an operationalmanufacturing plant for a period of 5year
✓ The facility is located at Kashipur,Uttarakhand and has manufacturingcapacity of 75,000 metric tonnes perannum (MTPA)
✓ This plant will cater to demand ofexisting clients of Genus Paper &Boards Limited and would help to addfew more clients in that region
✓ This strategy will help us to move faster inthe long term and build a sustainablebusiness model
Leased Plant Asset Light Strategy
Capitalized on Growth
✓ Opportunity to become a Dominantplayer in North India and increase ourmarket share
Synergy
On Track to be the Dominant Manufacturer
20
Future Prospect:
Kraft Paper Demand to outpace supply
Strong Presence of FMCG & Consumer Durable
Companies in North India
Brownfield Expansion
by 50,000 MTPA at Moradabad (UP)
Owned 140,000 MTPA at Moradabad (UP)
Leased 75,000 MTPA at Kashipur (Uttarakhand)
Total : 215,000 MTPA
Current Capacity
Leased Plant and Brownfield expansion is in line with Management
Vision to further Strengthen their Foothold in Northern India
We have entered into Non-Binding MOU’s as follows:
✓ Government of Maharashtra : Rs 1,050 cr for Setting up Kraft Paper Manufacturing Plant
✓ Government of Uttar Pradesh : Rs 600 cr for Expansion of Current Manufacturing Facility
Paper Manufacturing Process
21
Agro Residue
Wood
Waste Paper
Chemical Pulping
Mechanical Pulping
Washing & Bleaching
Bleaching
Chemical Additives
Paper Making (Stock Preparation, paper
machine etc.)
Finished Product
Raw Material
Waste paper Available in Abundance
~38% Domestic~62% International
Source: Care Report, IMRB
Hydro Pulping
Genus Paper
Cater to Packaging Needs of Multiple Industries
22The Brand Names/Model Designations mentioned in the Product List are the property of their respective owners and are used here for identification purpose only
Technology Advantage
23
Sweden machine to produce high quality finished paper by using low cost waste paper
Pulp Mill is equipped to process imported mixed waste
Forbes Marshall Steam & Condensate system for steam (power) saving and to improve efficiency of Drying Cylinder
Plant is equipped with state of art Quality Control System
Among the few Manufacturer to have Triple wire Machine
Competitive Advantage
24
11 MW Co-generation Captive Power Plant
Licensed borewell for sufficient Water Supply for our requirement
Strong Relation with Key FMCG Customers
One of Largest Capacities in Northern India
Zero Liquid Discharge plant with full fledged waste water treatment plant
Growth Drivers
25
Location AdvantageRecycle & Reuse of
Waste Paper
Exponential Growth
in Demand
Shift to
Value added
Products
Opportunity for Paper Industry
26
Global, 96%
India, 4%
229
74
13
57
USA China India World
4.75.3
2.5
2.7
7.5
9.7
0.8
0.6Speciality Paper & Others
18.5
Packaging Paper & Board
2016 FY19P
15.3
Newsprint
Printing & writing
Segment wise Demand (million tonnes)
Domestic Demand for Paperis expected to Grow at aRobust Pace
Packaging Paper and Kraftpaper to outpace theindustry with a CAGR ratesof 8.8% and 9% respectively
India’s Paper Production share in the Global Market
Per Capita Consumption of Paper (kg)
Source: Care Report
Kraft Paper: Industry Dynamics
Market Size of Pulp & Paper Industry: Kraft Paper– 4.71 MTPA
Packaging, 50%
Newsprint, 16%
Writing & Printing, 30%
Others, 4%
Kraft Paper
Duplex Board 21.0%
29.0%
Balanced mix of imported & Domestic Waste Paper
Kraft Paper
Major RM: Waste Paper
Industry majorly imports the waste paper
USA, 43%
UAE, 10%
Saudi Arabia, 7%
UK, 6%
Srilanka, 5%
Others, 29%
13,36512,901
14,29414,729
14,18914,244
15,800
12,000
13,000
14,000
15,000
16,000
2012 2013 2014 2015 2016 2017 2018
Domestic, 18%
Imported, 82%
Domestic, 47%Imported, 53%
Major Sourcing Countries for RM
Average price Trends for Waste Paper Imports
FY18FY13 Source: IMRB Report27
Exponential Growth in Demand for Kraft Paper
90% of demand for Kraft paper is from Corrugated box manufacturers End Users of Corrugated Boxes
6%
7%
61%
2016-17
10%
4%
8%
Consumer Durables
2021-22
10%
13%
3%
7%
18%
53%
E-Commerce
Others
Garments, Textiles & Footwear
Pharmaceuticals
FMCG
4.1
4.8
5.6
6.6
7.7
9
4.7
5.2
5.7
6.3
6.9
7.6
4
5
6
7
8
9
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
Corrugated Boxes Demand Kraft Paper Market (at Current Growth Rates)
FMCG Clients contribute Large Share of Genus Paper’s Revenue
Demand for Kraft Paper to outpace the production
✓ Genus Paper has recently expanded its capacity by ~50% by leasing amanufacturing plant
✓ Looking for other organic and inorganic means of capacity expansions
Source: IMRB Report
%
28
Priority to End Customer is Key
29
There is a concentrated presence of FMCGcompanies in the northern belt of India
Of all Kraft paper Mill in North India, only 5% have capacities more than100,000 TPA to cater to demand of large FMCG companies
Corrugated Box Manufacturing industry is estimated at ~ Rs 18,000 croreof which ~35% is located at North India
Genus Paper & Boards Ltd will benefit from Growing FMCG requirement
FMCG Plant
Genus Paper Plant
Map not to scale. All data, information and maps are provided “as is” without warranty or any representation of accuracy, timeliness or completeness Source: IMRB Report
Leased Plant
Our quality products approved by all major FMCG Clients
Incremental capacity of leased facility already has demand visibility inPlace
Genus Paper & Board Ltd has capacity of 215,000 MTPA
Shift to Value Added Products
65%
35%
Up to 20 BF
Above 20 BF
44%
56%
Up to 20 BF Above 20 BF
✓ Add new capacities via organic and inorganicmodes
✓ Higher sales of Kraft Paper with Bursting Factor(BF) greater than 22
✓ Focused towards increasing asset productivity,operating efficiencies and strengthening thecompetitive position
✓ Increased product offering of better quality tocustomers
✓ Better Realization
✓ Improved operating efficiencies
Way ForwardDemand For Kraft Paper in India
FY18 – Revenue Break up
Higher the Burst Factor(BF) better the realization
Source: IMRB Report30
Recycle & Reuse of Waste Paper
31Maximum output from Waste Paper
Industry will consolidate, only companies with Environment friendly
technology process will survive
✓ Our’s is Zero Discharge
✓ Environment friendly producer
Paper Bags : Sustainable Alternative
32
25 Indian states/UTs have some form of ban on polythene carry bags, but it is not yet
implemented
20 Indian states have a complete ban on manufacture, supply and storage of
polythene bags and other plastic items such as cups, plates, spoons, glasses while five
states have a partial ban
Companies are working to reduce the quantity of plastic packaging on one hand, and also to scale up alternative packaging
solutions
Consumers are switching to Eco friendly Kraft Paper Bags as a sustainable alternative
Map not to scale. All data, information and maps are provided “as is” without warranty or any representation of accuracy, timeliness or completeness
Financials
Profit & Loss Statement- Standalone
34
Particulars (Rs. Crs) FY18 FY17 YoY
Revenue from Operations (Net of Excise) 345.6 305.7 13.0%
Raw Material 234.3 220.7
Employee Cost 12.7 10.3
Other Expenses 62.6 52.9
EBITDA 36.1 21.7 65.9%
EBITDA Margin 10.4% 7.1%
Other Income 5.5 6.0
Depreciation 12.9 12.4
EBIT 28.6 15.4 86.1%
EBIT Margin 8.3% 5.0%
Finance Cost 6.1 5.9
Exceptional Item (Gain) / Loss 0.0 1.7
Profit before Tax 22.5 9.5 138.3%
PBT Margin 6.5% 3.1%
Tax 7.6 2.4
PAT 14.9 7.0 112.2%
PAT Margin % 4.3% 2.3%
EPS 0.58 0.27
As per Ind-AS
Balance Sheet-Standalone
35
Assets (Rs. Crs) Mar-18 Mar-17
Non-current assets
Property, plant and equipment 218.2 229.2
Capital work-in-progress 2.8
Financial assets
Investments 75.2 42.4
Loans 72.2 69.9
Deferred tax assets (net) 17.0 17.4
Tax Assets 0.1
Sub-total - Non-Current Assets 385.4 359.0
Current assets
Inventories 34.4 27.0
Financial assets
Loans 0.0 0.0
Trade receivables 76.8 63.9
Cash and cash equivalents 0.5 4.7
Bank balances other than Cash & Cash Equivalents
3.9 4.1
Others 0.4 0.4
Non Financial Assets 12.4 10.2
Sub-total - Current Assets 128.4 110.3
TOTAL – ASSETS 513.7 469.2
As per Ind-AS
Liabilities (Rs. Crs) FY18 FY17
EquityEquity Share capital 25.7 25.7
Other equity 329.1 313.8
Sub-total - Shareholders' funds 354.8 339.6
LIABILITIESNon-current liabilitiesFinancial liabilities
Borrowings 21.4 15.0Long Term borrowingsProvisions 0.6 0.6Deferred Tax Liability 23.6 21.4Sub-total - Non-current liabilities 45.5 37.0
Current liabilitiesFinancial liabilities
Borrowings 35.7 25.5Trade payables 52.6 52.1
Other Liabilities 20.7 11.9Provisions 0.2 0.3Current tax liabilities (net) 3.1 0.0
Non Financial liabilities 1.2 2.8Sub-total - Current liabilities 113.4 92.7
TOTAL - EQUITY AND LIABILITIES 513.7 469.2
Contact Details
36
Genus Paper & Boards Limited
CIN: L21098UP2012PLC048300
Mr. Lokesh PareekAGM- Corporate Finance & [email protected]
Mr. Anuj AhluwaliaCompany Secretary & Compliance [email protected]
www.genuspaper.com
Strategic Growth Advisors Pvt. LimitedCIN: U74140MH2010PTC204285
Mr. Shrikant SanganiM: 096195 [email protected]
Mr. Rahul Agarwal [email protected]: 079770 90416
www.sgapl.net